U.K. Urges Euro Banks Stress Tests

The U.K. Treasury has just joined the U.S. in urging European authorities to conduct what a Treasury minister calls “genuine, rigorous” stress testing of banks.

In excerpts of a speech he’s due to deliver tonight in Brussels, Mark Hoban, financial secretary to the Treasury, says the tests are needed because “it is clear that doubts remain over the solvency of some European banks.”

He says:

“The extraordinary interventions we have seen in recent weeks by Governments and the ECB were in large part due to severe strains in the banking system. A genuine, rigorous stress testing exercise is urgently needed to answer questions around solvency in severe market conditions. The tests should be transparent both with respect to their results, but also the methods used. Urgent action should be taken with respect to any institution failing the stress test. Only this way can we restore true stability and confidence to this sector in the near-term.”

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